Prepare, review, or create a Papua New Guinea GST return or any GST filing for a PNG business.
Source-cited draft.Written from sources but not reviewed by a licensed practitioner, so it may be incomplete or wrong. General reference only; don't file or take a position on it without professional review.
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Every figure is drawn from this Tax Guide and cited to its source.
Step 1: Transaction Classification Rules (heading)
See subsections 1a-1d for detail.
Determine Transaction Type
Sale (output GST) or Purchase (input GST). Salaries, superannuation, loan repayments, dividends = OUT OF SCOPE.GST Act 2003, Section 4
Determine Supply Location
Domestic (within PNG); Import (outside PNG); Export (outside PNG).GST Act 2003, Section 11-12
Standard rate
10%GST Act 2003, Section 17 (rate); Schedule 1 (zero-rated); Schedule 2 (exempt)
Zero-rated (0%) categories
Exports of goods and services; International transport; Supply of fine metal (gold, silver, platinum); Certain medical suppliesGST Act 2003, Section 17 (rate); Schedule 1 (zero-rated); Schedule 2 (exempt)
Exempt categories
Financial services (interest, insurance premiums); Residential rental; Education (registered institutions); Medical services (hospitals, clinics); Unprocessed food (fresh fruit, vegetables, fish); Water and sewerage (domestic); Public transportGST Act 2003, Section 17 (rate); Schedule 1 (zero-rated); Schedule 2 (exempt)
Determine Expense Category
Capital goods: assets > 1 year useful life; Trading stock: goods for resale; Services/overheads: rent, utilities, professional fees.
Step 2: GST Return Form Structure
Legislation applies to prescribed form.GST Act 2003; IRC prescribed form.
Step 3: Input Tax Credit Mechanism
Sections govern input tax credit mechanism.GST Act 2003, Sections 29-35.
Input Credit Eligibility
1. Business must be GST registered [T1] 2. Purchase must relate to making taxable supplies [T1] 3. Valid tax invoice held [T1] 4. Supplier must be registered [T1] 5. Goods/services received [T1]
Creditable Input GST formula
Creditable Input GST = Total Input GST x (Taxable + Zero-rated Supplies / Total Supplies)
Step 4: Deductibility Check (heading)
See Blocked Input GST Credit subsection.
Blocked Input GST Credit categories
These have ZERO input GST credit: Motor vehicles (private use); Entertainment; Personal consumption; Club memberships; Purchases without valid tax invoice; Purchases from non-registered suppliers; Goods/services for exempt supplies; Alcohol and tobacco (unless resale). Blocked categories OVERRIDE any other rule. Check blocked FIRST.GST Act 2003, Section 31.
Import GST
GST payable at importation. Calculated on: Customs Value + Customs Duty + Excise. Rate: 10%. Paid to PNG Customs. Recoverable if for taxable supplies.GST Act 2003, Section 24; Customs Act.
Resource Sector GST
Resource sector entities (mining, petroleum, LNG) may have: Specific GST provisions under their fiscal stability agreements; Different input credit rules; Special treatment for imported equipment during development phase; Zero-rating on certain supplies within the project. Do not classify resource sector transactions without reviewing the specific agreement. Escalate.GST Act 2003, Part 5; Mining Act; Oil and Gas Act.
Derived Calculations
Total Output GST = GST on all taxable supplies (10%) Total Input GST = GST on domestic purchases + GST on imports Net GST Payable = Total Output GST - Total Input GST - Credit B/F If Net < 0 = Refundable or carried forward Total Payable = Net GST + Penalties (if any)
Step 10: Refund Mechanism (heading)
Legislation applies.GST Act 2003, Section 40-42.
Refund Eligibility
Excess credits for 3+ consecutive months; Exporters with persistent credit positions; Resource sector (per agreement terms).
Refund Process
1. Apply to IRC 2. Audit may be conducted 3. Processing: 30-60 days
Prohibitions
- NEVER allow unregistered entities to claim input GST credit - NEVER classify exempt supplies as zero-rated - NEVER accept input credit without valid tax invoice - NEVER apply input credit on blocked categories - NEVER classify resource sector transactions without reviewing the specific agreement - NEVER file return without reconciling records - NEVER compute any number -- all arithmetic is handled by the deterministic engine, not the AI
EC3
**Situation:** Gold mining company sells refined gold. **Resolution:** Zero-rated supply. No output GST. Full input credit on related costs.GST Act 2003, Schedule 1.
Step 14: Invoice Requirements (heading)
Legislation applies.GST Act 2003, Section 35.
Mandatory Contents of Tax Invoice
1. Supplier's name, address, and TIN 2. Buyer's name and TIN (if registered) 3. Date of issue 4. Sequential invoice number 5. Description of goods/services 6. Quantity and unit price 7. GST rate (10%) and GST amount 8. Total amount including GST 9. Words "Tax Invoice" on the document
Invoice Types
Full Tax Invoice: For B2B, enables input credit. Abbreviated Invoice: For retail under PGK 500. Credit/Debit Note: For adjustments.
Step 15: Record Keeping (heading)
Legislation applies.Tax Administration Act 2015, Section 48.
Mandatory Records (retain for 7 years)
1. All purchase and sales invoices 2. GST account / control account 3. Import documentation (customs entries, bills of entry) 4. Export documentation (export entries, bills of lading) 5. Bank statements and payment receipts 6. General ledger, journals, trial balance 7. Stock/inventory records 8. Fixed asset register 9. Credit and debit notes 10. Employment records (separate from GST but required)
Mining
Mining operations under fiscal stability agreements may have different GST rules. Equipment imports may qualify for concessional treatment. Gold refining and export: zero-rated. Always escalate mining GST questions.
Petroleum and LNG
LNG project entities may have GST exemptions under their Tax Credit Agreement. Subcontractors to LNG projects: complex treatment. Always escalate petroleum/LNG questions.
Agriculture
Unprocessed food (fresh fruit, vegetables, fish): exempt. Processed food: GST at 10%. Agricultural inputs (seeds, fertilizer, tools): GST at 10%, credit allowed. Coffee, cocoa, copra exports: zero-rated.
Fisheries
Fresh fish (unprocessed): exempt. Canned/processed fish: GST at 10%. Export of fresh fish: zero-rated. Input credit on fishing equipment allowed if registered.
Construction
Construction services: GST at 10%. Progress billing: GST on each stage. Input credit on materials and subcontractors allowed. Government contracts: standard GST applies.
Step 18: Audit and Appeals (heading)
See subsections.
Audit Process
1. IRC may audit within **6 years** of filing 2. Types: desk review, field audit, comprehensive audit 3. Resource sector entities: priority audit targets 4. Risk-based selection using data analytics
Appeals
1. File objection with IRC within **60 days** of assessment 2. Appeal to Tax Review Tribunal within **60 days** 3. Further appeal to National Court **Escalate any audit situation to qualified practitioner.**
Currency and Reporting
All GST returns filed in PGK (Papua New Guinea Kina). Foreign currency transactions: Bank of Papua New Guinea rate on date of supply. Import transactions: customs exchange rate at date of declaration. Resource sector entities may have USD-denominated contracts; convert per transaction.
Provincial and Local Government Supplies
Supplies by government agencies: generally exempt. Supplies TO government: standard GST at 10%. Government contracts: GST applies on contract value. Government may withhold income tax on payments (separate from GST).GST Act 2003.
Informal Sector Considerations
PNG has a significant informal economy. Purchases from unregistered / informal sellers: no input credit. Market vendors below threshold: not required to register. Businesses buying from informal sector: full cost as expense, no GST recovery. Flag for reviewer: material purchases from informal sector may attract IRC attention.GST Act 2003; IRC rulings.
Rendered from the canonical facts model. General reference only — confirm with a qualified professional before acting.
Skill Metadata
| Field | Value |
|---|---|
| Jurisdiction | Papua New Guinea |
| Jurisdiction Code | PG |
| Primary Legislation | Goods and Services Tax Act 2003 |
| Supporting Legislation | GST Regulations; Tax Administration Act 2015 |
| Tax Authority | Internal Revenue Commission (IRC) |
| Filing Portal | IRC offices; MyIRC online portal (limited services) |
| Contributor | Open Accounting Skills Registry |
| Validated By | Pending local practitioner validation |
| Validation Date | Pending |
| Last Verified | 2026-04-10 -- web-research cross-check of rates, thresholds, deadlines |
| Skill Version | 1.1 |
| Confidence Coverage | Tier 1: standard rate classification, input-output mapping, return structure. Tier 2: resource sector, exempt supplies, partial credit. Tier 3: mining/petroleum agreements, LNG project tax, complex group structures. |
Every rule in this skill is tagged with a confidence tier:
Before classifying ANY transaction, you MUST know these facts about the client. Ask if not already known:
If any of items 1-3 are unknown, STOP.
GST Return Sections
| Section | Description |
|---|---|
| Part A | Entity information (TIN, name, period) |
| Part B | Output / Sales |
| B.1 | Taxable supplies at 10% |
| B.2 | Zero-rated supplies |
| B.3 | Exempt supplies |
| B.4 | Total supplies |
| Part C | Output GST |
| C.1 | GST on taxable supplies |
| Part D | Input / Purchases |
| D.1 | Creditable acquisitions (domestic) |
| D.2 | Imports (GST paid) |
| D.3 | Non-creditable acquisitions |
| Part E | Input GST credit |
| E.1 | GST on domestic purchases |
| E.2 | GST on imports |
| E.3 | Total input credit |
| Part F | Net GST |
| F.1 | Output GST minus input credit |
| F.2 | Credit brought forward |
| F.3 | Net payable or refundable |
Key Thresholds
| Threshold | Value |
|---|---|
| Mandatory GST registration | Annual turnover > PGK 250,000 |
| Voluntary registration | Below threshold |
| Monthly filing | Annual turnover > PGK 1,500,000 |
| Quarterly filing | PGK 250,000 - PGK 1,500,000 (threshold raised from PGK 1,000,000 per 2025 National Budget) |
Filing Deadlines
| Category | Period | Deadline |
|---|---|---|
| Monthly filers | Monthly | 21st of following month |
| Quarterly filers | Quarterly | 21st of month following quarter end |
| Payment | Same as return | Same deadline |
Late Filing Penalties
| Default | Penalty |
|---|---|
| Late filing | PGK 500 per day (max PGK 10,000) |
| Late payment | 20% of unpaid amount |
| Non-filing | Assessment by IRC + penalties |
| Tax evasion | Criminal prosecution |
See EC1-EC8 subsections.
Situation: Mining company imports heavy machinery during development. Resolution: May have special GST treatment under fiscal stability agreement. Escalate.
Situation: PNG company pays for consulting from Australian firm. Resolution: Self-assess GST at 10%. Claim input credit if for taxable supplies. Flag for reviewer.
Situation: Farmer sells fresh vegetables at market. Resolution: Exempt supply. No GST. Seller cannot claim input credit on farming inputs.
Situation: Customer returns goods, credit note issued. Resolution: Seller reduces output GST. Buyer reverses input credit.
Situation: Business buys used vehicle from individual. Resolution: No input credit. No GST charged. Full cost as expense.
Situation: Construction company works in remote location, purchases from unregistered village suppliers. Resolution: No input credit on purchases from unregistered suppliers. Flag for reviewer if amounts are material.
Situation: Shipping company provides international freight services. Resolution: Zero-rated. No output GST. Full input credit on vessel costs, fuel, port charges.
When a [T2] situation is identified:
REVIEWER FLAG
Tier: T2
Transaction: [description]
Issue: [what is ambiguous]
Options: [list possible treatments]
Recommended: [most likely correct treatment]
Action Required: Qualified accountant must confirm before filing.
When a [T3] situation is identified:
ESCALATION REQUIRED
Tier: T3
Transaction: [description]
Issue: [what is outside skill scope]
Action Required: Do not classify. Refer to qualified accountant. Document gap.
See Test 1-8 subsections.
Input: Domestic sale of hardware supplies, net PGK 50,000, GST PGK 5,000. Registered. Expected output: B.1: PGK 50,000. C.1: Output GST PGK 5,000.
Input: Purchase from registered supplier, net PGK 20,000, GST PGK 2,000. Valid invoice. Expected output: E.1: Input GST PGK 2,000. Full credit.
Input: Export of coffee, FOB PGK 200,000. Documentation complete. Expected output: B.2: PGK 200,000 at 0%. Full input credit recovery.
Input: Client entertainment, PGK 3,000, GST PGK 300. Expected output: Input GST PGK 0 (BLOCKED).
Input: Import equipment, CIF PGK 100,000. Duty PGK 10,000. GST at 10% on PGK 110,000 = PGK 11,000. Expected output: E.2: Input GST PGK 11,000. Credit allowed.
Input: Sale of refined gold PGK 5,000,000. Expected output: B.2: PGK 5,000,000 at 0%. No output GST.
Input: Entity: 80% taxable, 20% exempt. Total input GST PGK 50,000. Expected output: Creditable: PGK 50,000 x 80% = PGK 40,000.
Input: GST payable PGK 10,000. Filed on time but paid 10 days late. Expected output: Late payment penalty: 20% x PGK 10,000 = PGK 2,000.
See sector subsections.
Penalties Detailed Summary
| Offence | Penalty |
|---|---|
| Failure to register | PGK 1,000 + retrospective registration |
| Late filing | PGK 500 per day (max PGK 10,000) |
| Late payment | 20% of unpaid amount |
| Non-issuance of invoice | PGK 500 per instance |
| Fraudulent return | Up to 200% of understated tax + criminal prosecution |
| Failure to maintain records | PGK 1,000 |
| Under-declaration | Additional tax + penalty |
| Tax evasion | Criminal prosecution, imprisonment |
This skill must be validated by a qualified CPA practicing in PNG before use in production.
A skill may not be published without sign-off from a qualified practitioner in PNG.
This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.
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Other Papua New Guinea computations in the OpenAccountants Tax Library.